Reclaiming Mortgage Fees?

Cashby

Hi, I was wondering if the same rules for unfair charging might apply to some of the extortionate mortgage arrangement fees I have been charged, eg 1.5% or £2,500? Any thoughts?

Edinburghlass_2

Basically no as these are fees you agreed when signing up for your mortgage. Do a search using the "search this forum" and you'll find plenty of thread regarding morgage arrangement fees.

InMyDreams

I wouldn't do a search if I was you... you might get scared away! But here is a thread that explains it all and stayed friendly ;-)

(I think I will have to bookmark that thread. Thanks dunstonh et al.)

http://forums.moneysavingexpert.com/showthread.html?t=790513

ixwood

The most i've ever paid was £600, but it's the overall cost that's important.

Why would you agree to "extortionate" fees in the 1st place?

dwsjarcmcd

ixwood wrote: »

The most i've ever paid was £600, but it's the overall cost that's important.

Why would you agree to "extortionate" fees in the 1st place?

beacause presumibly the OP got a lower payment rate. As has been said many times, higher fee = lower rate, medium fee = medium rate and lower fee = higher rate.

homer_j_3

To the OP they were extortionate as there was mis-perception of the true value these fees brought to the products that they benefited from.

The fact remains that they are legal and that the OP has some further information to look at.

InMyDreams

ixwood wrote: »

People that clueless shouldn't be allowed mortgages.

:shocked: Rubbish. And not very helpful or friendly.

People 'that clueless' need help to understand, not snide remarks. I can totally understand the frustration by regulars because of the frequency that this question gets asked, but if it bothers you that much, just ignore it.

ixwood

Fair point. Although I think it's fair to question why someone willingly paid "extortionate" fees. Why would you? If it was to get the better rate (on a large mortagge maybe), then surely they'd appreciate they weren't extortionate?

InMyDreams

ixwood wrote: »

Although I think it's fair to question why someone willingly paid "extortionate" fees. Why would you? If it was to get the better rate (on a large mortagge maybe), then surely they'd appreciate they weren't extortionate?

Yes, it's a fair question. I guess the answer is that people who are a bit 'clueless' recognise that they are, and are (rightly) worried about being taken for a ride because they don't understand something. What seems obvious to us, isn't to everyone. They don't even know what else there might be that they don't understand.

I still kick myself for taking out the endowment with my first mortgage. Not because it was an endowment and it didn't do as well as I hoped. I did understand and accept the risks. But becasue I didn't realise that the endowment and the mortgage were actually two separate products. We went to a lot of effort to get the right mortgage and just took the endowment the adviser gave us. We thought 'whole of market' meant the endowment too. I can't BELIEVE I was so stupid not to notice that the endowment was with a different company to the mortgage, and the company that the 'whole of market' advisor also happened to be from. :rolleyes:

mitchaa

Cashby wrote: »

Hi, I was wondering if the same rules for unfair charging might apply to some of the extortionate mortgage arrangement fees I have been charged, eg 1.5% or £2,500? Any thoughts?

You are buying an interest rate, so why should you get it back.

For example...

Without an arrangement fee you are offered 5.75%.
With an arrangement fee you are offered 4.75%

The BOE BR is 5.25%, so why would any lender lend under this rate? They do but they make it up in high arrangement fees!

You're basically trying to get the 4.75% rate for nothing then.

Doesn't make sense does it;)

dunstonh

Whilst the IQ of the person isnt an issue with mortgages. From 1st November last year it did become an issue with investments. Advisers now have to consider the mental ability of the person to understand what they are doing before they recommend investments. It can mean that you have to dumb down your advice to those with a more limited understanding.

Whilst this hasnt been extended to mortgages (yet), it is interesting to see that IQ is beginning to be considered in financial services.

Clearly, the OP doesnt understand that they have bought a cheaper rate by paying a higher fee. A bit like buying a larger television costs more than a smaller television. You cannot claim that back arguing that the cost of the large tv should be the same as the small one. However, this is one of lack of eduction and understanding and a bit of the compensation culture we have now.

I am sure that most of the advisers here have seen how many times this type of thread crops up and make a point of ensuring their clients are aware of the pros/cons of high/low fee & how/low interest rates that go with them. However, with a large number of people buying direct or not using an adviser, you do fear that they will never learn or understand why.